Residents have asked me, "Why another tax? Can’t the city fix the financial constraints some other way?"
The city provides many services with the current 1% general sales tax approved by the voters in 1969. This is the tax that allows the city to provide general services such as police, fire, engineering and neighborhood improvement, just to name a few. Through the many budget sessions I have participated in, I have learned the city operates pretty efficiently. In fact, in 2010, the general fund operational costs were $6.1 million, and over the last several years have been reduced to $5.2 million for the upcoming 2020 budget year. Operational costs include items such as utilities, supplies and maintenance contracts, many of which we have little to no control over.
In 2018, the 1% general sales tax generated about $13.2 million, while general fund police and fire costs were over $15.5 million. As expenditure growth has been outpacing the growth in the sales tax revenue, the city has made changes over the past several years while continuing to provide the same level of services to the community. Wages and capital replacement were frozen,15 positions were eliminated resulting in layoffs, the outstanding debt on City Hall was paid off, along with other expenditure cuts. While these changes helped, they are not long-term, sustainable financial solutions.
In the hopes of finding a long-term solution, an internal work group was formed. The group included both chiefs from the police and fire departments, two staff members from each department, police and fire union reps, our city attorney, interim city manager, finance director, a general employee representative, the public information officer, mayor pro tem and me. The facts aren’t good. Currently the Police and Fire Pension Plan is only 64% funded, leaving a gap of $24 million to fund retirement benefits for pension members.
In 2009, pension benefits were decreased for newly hired public safety employees as the cost of the plan grew and the funded level of the plan decreased. This reduction in retirement benefits has made it more difficult to attract and retain experienced workers. And, the reduction hasn’t substantially improved the pension funding problem.
Prop B is a one-half cent sales tax for no longer than 12 years. This tax will provide the necessary funding to close the city’s underfunded police and fire employees’ pension plan. It also will provide the funding to move current and newly hired police officers and firefighters to a more cost-effective state authorized retirement plan, the Missouri Local Government Employees Retirement System, or LAGERS.
Prop B makes financial sense for you and me, the taxpayers of Joplin. The pension plan will cost $3 million this upcoming fiscal year. By comparison, if all current public safety employees were on LAGERS, the annual cost would be approximately $1.7 million. By funding and closing the pension plan with a temporary tax, we taxpayers will save money in the long run by moving to a more cost-effective retirement plan. It is projected to save about $28 million over 20 years.
Prop B provides a long-term solution to help relieve the strain on the general fund and address police and fire recruiting and retention. As a sales tax, the solution will be paid for by all those who shop and visit our community, all who are benefiting from the protection of our police officers and firefighters.
And that is the reason that the city is asking you and me, as residents, if we’d be willing to pass a one-half cent sales tax with a sunset date to help with the recruitment and retention of our police officers and firefighters.
You and I never plan on having to call 9-1-1. But if and when we do, don’t we want to be reassured that the best and the brightest are on their way to help us and our family and friends during our emergency? That’s what Proposition B is dedicated to do. It will provide funds to help improve recruitment and retention of Joplin police officers and firefighters.
To hire quality men and women and keep our well-trained and experienced workers, the city needs to ensure that its benefits are secure and competitive with other cities and agencies. Police officers and firefighters do not pay into Social Security or receive Social Security benefits from their employment with the city, so the retirement plan is an important part of their compensation.
Experienced firefighters and police officers are incredible assets for our community. They arrive to scenes of chaos and danger, then quickly assess the situation and take action to provide lifesaving measures, crowd-calming tactics and well-trained directions to help us in times of need. Their training and expertise are invaluable to our community. Proposition B is a better plan for Joplin.
Thank you for your consideration of this important question on the Nov. 5 ballot.
Gary Shaw is mayor of Joplin.